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http://www.bluechip-stocks.com/penny-stocks/what-does-the-future-hold-for-investments-in-commodity-penny-stocks-and-rare-earth-minerals

What does the future hold for Investments in Commodity Penny Stocks and

Rare Earth Minerals?

Iron ore, aluminum, steel and copper are some of the industrial commoditieswhich are used as inputs for the production of goods. Where the trading valuesper share of the companies that undergo mining operations on the lands to whichthey have acquired rights are below $10.00, the stocks of such companies arereferred to as hot commodity penny stocks.

As with any investments, utmost care should be taken before putting money incommodity penny stocks. Unlike investments in gold and oil, which offer goodpotential for investments in the bullish stock market, there should be an apt

timing for the same in commodity penny stocks and that too, after thoroughresearch about the companies wherein investing is to be done. As such, thetakers for this type of market are few.

If we consider iron ore, it is easily found in the crust of the earth, but it involves adifficult and hence expensive process of transformation from rock to iron ore.Investing in iron ore is vital in Asian countries, where cities are still in the processof being developed. For the same, steel is essential and hence iron oreinvestments gain importance here. India used to previously export a majorportion of its iron ore to China; but now as it has its own needs for the same, theexports are of the tune of only about 30 million tones out of an estimated

production of 150 million tones in 2012. In addition, with China also buyingapproximately 60% of the worlds supply of iron ore for its own, it leaves nationslike Australia and Africa to increase their investments in iron ore.

The grade of iron ore of China is different from that of Australia and Africa.Because of this, China has a close association with the mining countries in thelatter countries as regards its mining investments. It seems that iron ore investingwill continue to rise as long as there is demand for it in the Asian countries.

Seventeen chemical elements; i.e. lanthanum, cerium, praseodymium,neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium,holmium, terbium, thulium, ytterbium, lutetium, scandium and yttrium constitutethe rare earth metals. These metals have their uses in the growing technologiesof the world. Despite their bountiful existence below the crust of the earth, theyare mostly present in nature in a scattered state. The major producer of rareearth minerals in the world is China. With only one country to depend on for theirrare earth needs, many nations around the world sometimes experiencedifficulties whenever the matters of their supplies arise. Hence it has

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necessitated in the global mining companies to be on the lookout for rare earthdeposits that can be economically feasible for their operations.

Their areas of exploration comprise Africa, Australia, the U.S. and Canada. Itwas a known fact since many years that these aforementioned nations are

blessed with the rare earth minerals, but retrospectively, the lower costs incurredby Chinese companies in order to excavate these rare earth minerals out of theground has prevented the development of the mining companies in the above-mentioned four nations. But now, as the technology is moving forward, there hasbeen a rise in the prices as demand for them also rises.

The pricing of the rare earth is quite volatile and there was a correction last year.But if one considers the long term, the trend looks optimistic. After all, the timerequired for the entire procedure; right from the exploration stage of the rareearth minerals to their actual market appearance by companies needs manyyears to complete. It would be wise to consider the acquisition of the stocks of

such mining companies before there is a rise in the prices. Also, if a company isin the early exploration stage, it would be wise to exercise caution, as at thatstage, there is no guarantee of what the excavations would yield.

Rare earth investment opportunities will grow as technology advances and therewill be building of more devices; in turn, there will be a growing demand for themining companies.

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